Portland couple who won apology from Nationstar in foreclosure case say it's trying to foreclose again

A Portland couple who received a loan modification and an apology from Nationstar Mortgage last year to settle their wrongful-foreclosure claims now say the company is trying to foreclose again even though they made all their monthly payments.

Michael and Judy McEldery of Northeast Portland found themselves facing foreclosure last year when they say Nationstar Mortgage — as a pretext to initiate the process — delayed applying one of their payments until after its due date.

The couple sought to block the foreclosure, and Michael McEldery, 67, followed up with claims the company had engaged in elder abuse, unlawful trade practices and breached its contract with him. The company agreed to apologize and modify the loan and bring it current to settle the case, said Michael Fuller, the McElderys' attorney.

But this summer, the McElderys say, their payments to Nationstar were applied late again. Contacted by Fuller, Nationstar said their account was $45,000 in arrears.

The new complaint, filed in U.S. District Court in Portland on Thursday, accuses Nationstar of breaching the settlement agreement and illegally profiting from payments the McElderys have made in the meantime, when they believed a modification was in place.

"Now my clients are at risk of losing their home once again," Fuller said. "It's almost exactly the same conduct, except this time we've got a signed modification agreement."

A Nationstar spokesman said the company doesn't comment on litigation.

Judy McEldery said they first sought a loan modification when her mother died and it became clear that, without her Social Security and pension benefits, they soon would not be able to afford payments.

But it was the allegedly misapplied payments during their first trial modification that precipitated the original foreclosure action in 2013.

The two thought the situation was resolved in January, when they started making lower payments under the second modification, reached as part of the settlement.

But they started sending the payments by certified mail with a return receipt and watching to see when the funds were deducted from their bank account. That's how they say they again noticed delays between when the payment was received and when it was applied.

"It was just a constant, constant, constant worry," Judy McEldery said. "Every day, we were looking on the computer to see if they had taken the money."

The couple is asking for a jury to award punitive damages and sanctions. In a separate action, the McElderys are asking a judge to hold Nationstar in contempt and award $10 million for violating the earlier settlement.